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EEOC Informal Discussion Letter

The U.S. Equal Employment Opportunity Commission

EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.

ADEA & EPA: Insurance Coverage for Statutory Violations

September 28, 2009

Dear ___ ____:

Thank you for your recent inquiry regarding _________ Insurance Company’s endorsement form which covers entities and/or their officers and directors for violations of the Age Discrimination in Employment Act and the Equal Pay Act.

The EEOC has not taken a policy position on this type of insurance coverage. States disagree about whether such policies are contrary to the public interest, and public policy varies accordingly. States prohibiting them argue that they encourage discriminatory conduct. See, e.g., Boston Housing Auth. v. Atlanta Intern. Ins. Co., 781 F. Supp. 80, 83-84 (D. Mass. 1992). States allowing them argue that they ensure full recovery for victims of discrimination. See, e.g., Ranger Ins. Co. v. Bal Harbour Club, 509 So. 2d 945, 946 (Fla. Dist. Ct. App. 1987), rev’d, 549 So. 2d 1005, 1008-09 (Fla. 1989). The public policy determination often turns on the policy’s details, such as whether it covers intentional acts, see, e.g., Paperplains, Inc. v. Atlanta Mut. Ins. Co., 67 F.3d 308, 308 (9th Cir. 1995) (unpublished), or whether it provides indemnification in addition to the duty to defend, see, e.g., Clinton v. Aetna Life & Surety Co., 594 A.2d 1046, 1049 (Conn. App. Ct. 1991).

Because the EEOC does not take a position on this issue, it encourages the Texas Department of Insurance to use its own best judgment to resolve the matter.

I hope that this information is helpful. Do not hesitate to contact me with any further questions.

Aaron Konopasky, J.D., Ph.D.
Equal Employment Opportunity Commission
Office of Legal Counsel

This page was last modified on January 25, 2010.

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